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RET

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  1. RET

    Oxford

    Oxford Uni reported yesterday that they are going to build a large area of housing to rent to staff at low prices (sounds as it it'll be in wolvercote) see article We both work for the University and I have to say that housing is becoming a major issue in recruitment. Quite a few of the Colleges have had to start generous shared equity schemes to recruit and retain (well they've always had some housing help but many have increased it dramatically). I have to say that I can't see cheap rental being too attractive for many people but the situation is far better than it is for the majority of people who work for smaller organisations. At this rate I can see a copy of the anti-'English second home owner' actions in Wales - we'll have groups of dons roaming North Oxford at night setting fire to villas owned by London weekend commuters! Also, the Nationwide annual results for regions were out today. Oxfordshire is down 1.2% over the year with the breakdown as follows: Cherwell 4.9% Oxford 0.5% West Oxfordshire -0.4% Vale of White Horse -1.9% South Oxfordshire -5.8%. Doesn't sound like a booming year...I have to say that that pretty much tallies with what I have seen.
  2. RET

    Oxford

    I think that Oxford is a very odd market. There are very few really nice areas to live in. The only really attractive (nice housing, broad leafy streets etc) area to live in is North Oxford (and not all of that). Yet lots of people with money (esp from London) want to move to Oxford to bring up their kids etc. This external money wants the North Oxford dream and has the money to push the prices up. This means that there is a lot of pressure on the best roads in terms of sales and price (e.g. Staverton Road). The rest of Oxford (and I live in 'the rest' of Oxford) tends to be characterised by small, damp outdated housing much of it with quite a high flood risk. The people buying these houses aren't the ones with the London money so they rely on local wages. Local wages are pretty much in line with the rest of the country but the housing is way over average prices. This means that there is little competition for those houses so they are sticking a prices aren't under any pressure (falling a bit in some areas rising slowly in others). If I buy, for personal reasons, it may be in one of two brackets, one around £300K and one around £500K. For this reason I monitor a wide price range in Oxford and just outside. I would say that the mid range stuff (around £300K) is hardly moving. The bottom end (sub £200K) moves quickly for good quality but other stuff sticks. The top end is fast for the very best locations but outside of those areas it is sticking as much as the rest. I think that this probably explains the differences in views on hear. Do you agree?
  3. Bedsprings - do you really think that you will still be able to BTL through a SIPP? He does say: "From 6 April 2006 SIPPs and all other forms of self-directed pensions will be prohibited from obtaining tax advantages when investing in residential property." That does sound fairly conclusive (although admittedly in the sentence before he is talking about 2nd homes and family use of property)
  4. surely this SIPPs thing is important. On PMT they are quoting him as saying: "5.63 A small part of the proposed simplification would allow all registered pension schemes to invest directly in residential property. To prevent the potential abuse of the simplification rules, where people could claim tax relief in relation to pension contributions into Self Invested Personal Pensions (SIPPs) for the purpose of funding purchases of holiday and second homes for their or their family's personal use, from 6 April 2006 SIPPs and all other forms of self-directed pensions will be prohibited from obtaining tax advantages when investing in residential property, and certain other assets such as fine wines. This action will ensure that tax relief is only given to those whose purpose in making the contribution is to provide themselves with a secure retirement income. However, the Government remains committed to encouraging investment in a range of assets as part of pensions saving and is therefore minded to allow SIPPs to invest in genuinely diverse commercial vehicles that hold residential property, such as the proposed Real Estate Investment Trust model (detailed further in Chapter 3). The Government will not hesitate to take action if it becomes clear that people are trying to use collective vehicles to get around the rules for prohibited assets." It's not clear exactly what that means but it could be read as saying that all residential property is banned from SIPPs unless it is a REIT. Surely that neutralises much of the threat from SIPPs if true?
  5. I can see what you are saying about adjusting expectations 'homeowner'. One solution is to decide to lower your expectations on the type of place that you can buy. The other, which does seem to work at the moment, is to lower your expectations on when you can buy it. We have accidently done the latter because, for personal reasons, we have only just reached the stage when we feel settled enough about our long term future to buy where we are. Interestingly in the last 3/4 yrs we have found that the quality of what we can afford has just shot up. As a comparison, we are very good friends with a couple who are in almost identical cicumstances to us in terms of salaray etc (we're all on the same scale and are in the same year). They did buy about 3 1/2 yrs ago at the same time we were thinking about it and they have just sold. The house that they bought was pretty much the same as we would have bought then (ugly 70s terrace that needed updating on a council estate). They bought for about £160K and have just sold for £190K (although that was with a new kitchen, new bathroom, new carpets etc). We were there for dinner last night and they dropped in that they have now got a 30% deposit for their next place and are looking at places for £225K. I mentioned in that we had a 50% deposit and were looking at £300K. They were absolutely astounded, why? Because they are convinced that 'renting is dead money' and that the best move is always to buy. Essentially we have lived in far nicer places than we could have 3 yrs ago. In the meantime we have been paying far less than if we had bought, we haven't been paying maintenance or aquisition costs and our deposit has gone up with no effort. Similarly we have had some salary rises. Result seems to be that we have had a far higher standard of living that if we'd done the 'first rung' and can now go straight in to something we like. This wasn't deliberate but whilst the market is flat and renting cheaper than buying the best option might be to change expectations on timing rather than quality.
  6. Thanks for the replies. I've been wondering whether it is a 'sign of the times' too. I'm not sure whether this is something that will be used more frequently by employers. However, I'd be cautious about drawing too many conclusions. This is an extremely old (read hundreds of years) educational institution with an endowment of at least tens of millions (I think hundreds of millions) so plenty of money to invest and not too much worry over pumping a few hundred thousand here and there into an overheated housing market. They do seem to feel that they have to offer this option to attract decent staff and certainly pushed it when offering me the job. Having said that until about 20 yrs ago they used to buy a house for their staff (i.e. employer owned it for life and staff lived there till retirement). Interesting to see if hapens elsewhere...
  7. Hi there Tempest, thanks for the reply. I've not got a copy of the small print yet as am just in the process of signing contracts etc (and would take the job without this scheme). My understanding is that we would be legal owners but that there would be a trust deed stating that they own x% of the house. This means that they do take the risk of drops as well as the benefits of rises (i.e. if they buy £100K of a £400K property then they receive £125K of the sale proceeds if we sell at £500K and £75K if we sell at £300K) so we would not have a higher gearing than we would if we bought alone. The option to buy all or part of their share is at our discretion provided that we can agree a valuation. Don't know if they could prevent sale but they can't force sale unless I resign in which case there is a couple of yr window in which have to sell or buy their share. To be honest, I can't see me leaving unless it's for something that makes it incredibly financially worthwhile. This is pretty much the ideal job in my field and the employer is not going to go bust or suffer from economic downturn or merge (very well established, rich, educuational institution). On the other hand, I do know that costs of maintenance would be ours and any capital improvements (e.g. conservatory) would have to be approved by them. If we make capital improvements then either we split costs along the lines of ownership or the enhanced value of the house is reflected in an increase in our share (i.e. a new trust deed). Does that sound any more comforting or do you still think no? Obviously I would not enter into this until I had gone through the details with a fine toothcomb but I'm trying to think about whether it is even worth thinking about in principle (we would have to wait till Sep to buy under the scheme and if we're definitely not doing it then we MIGHT buy ourselves this winter when things are slow. Thanks for your help Sarah
  8. I am not sure that I want to buy yet (for all the obvious reasons) but leaving that Q aside, I'd be really grateful for your thoughts on what you would do in this slightly unusual situation. I've got a new job that will be starting next year. The job is perfect and we are pretty sure that we are going to stay where we are for the long term. Job is pretty recession proof. In the past we only had short term contracts so wouldn't buy. Now we can. We are both nearly 30, have no kids but are planning them soon. We have built up a huge deposit meaning that with 2 1/2 times joint salaries plus deposit we can afford £300K. Unfortunately we live in an extremely expensive place so this sum only really stretches to a 2 bed flat in nice area or a 3 bed terrace in slightly grotty area. But.... New employer has equity scheme where they will buy with you. If we took about £150-200Kish from them we could afford 4 bed detached in nice area where we could stay for the long term. Scheme means that they part own the house and that they then receive that portion on sale. Alternatively we could buy them out in chunks at an agreed valuation. Would you take it? There are some costs associated with it: I would take a small salary cut of about 2-3K, cheapest mortgages don't accept the scheme and we would have to pay all maintenance and council tax. Quality of life would be better though. Any thoughts on this and how far the capital appreciation/risk varies between the two options? I'm not sure that we will buy anything at this stage but I want to think about what we will do if we do. Thanks in advance Sarah
  9. RET

    Oxford

    Update on OX. My friends' sub-200K house within ringroad sold within 10 days of viewing. Loads of people round to see it. Not sure what % of asking but I know that they were basically waiting for the asking. I also see that shakerbaby's mate's house has sold. I feel (but cannot prove) that things are starting to pick up here esp at the low end. May be wrong and just affected by a few annecdotes though...
  10. I've been very happy renting (I've never owned) for the following reasons: 1. We're living somewhere that suits us perfectly now (city centre flat - sorry executive apartment) but won't in a couple of years time. We couldn't do that if we bought without paying lots on transaction costs 2. We've been unsure as to where we'll be long term so the felxibility of renting has meant that we can consider the future and interesting posts elsewhere without the worry of how to sell etc. 3. We've lived way below our means and saved a deposit of about 50% 4. We've no responsiblity for maintenance etc so when it was discovered that our last place had serious structural problems we just moved out. 5. The flat is very nicely decorated and located and the landlord is very reasonable so we don't have any frustrations about decorating/fearing arbitrary decisions etc 6. When I decided to change jobs and had to take a yr out for a course and a salary drop thereafter we could do that without worrying about having taken on a mortgage that suited our previous lifestyle. We're now getting to the stage where we're starting to see some problems with it but only because we're now settled in long term jobs, are thinking of having a family and want to be somewhere settled for that. I realise that you can have kids and rent but I have had friends who've had a lot of stress moving whilst pregnant/wth small children and it doesn't seem ideal esp as many landlords object.
  11. RET

    Oxford

    Yes the numbers do appear to support what you say (although of course it's difficult to compare properties without looking at how smart/extended they are etc). On that road ourproperty says that the sales since 2004 are: 10 May 2005 62 Cornwallis Road, Oxford, Oxfordshire OX4 3NL Semi-Detached £209,500 30 Mar 2005 61 Cornwallis Road, Oxford, Oxfordshire OX4 3NN Semi-Detached £202,500 22 Nov 2004 23 Cornwallis Road, Oxford, Oxfordshire OX4 3NP Semi-Detached £187,000 28 Oct 2004 90 Cornwallis Road, Oxford, Oxfordshire OX4 3NL Terraced £210,000 15 Sep 2004 80 Cornwallis Road, Oxford, Oxfordshire OX4 3NL Semi-Detached £195,000 8 Sep 2004 20 Cornwallis Road, Oxford, Oxfordshire OX4 3NP Semi-Detached £213,500 25 Jun 2004 98 Cornwallis Road, Oxford, Oxfordshire OX4 3NL Terraced £215,000 16 Jun 2004 7 Cornwallis Road, Oxford, Oxfordshire OX4 3NP Semi-Detached £225,000 23 Apr 2004 79 Cornwallis Road, Oxford, Oxfordshire OX4 3NN Terraced £186,000 9 Jan 2004 77 Cornwallis Road, Oxford, Oxfordshire OX4 3NN Semi-Detached £188,000 However, as shavedchimp says, prior to 2004 they were a lot lower so we're really just seeing a little froth coming off. Friends of mine put their house on the market last week. It's sub-£200K and they had 6 viewers on the first day. Will keep you posted.
  12. Thanks that clears some of those questions up. Something that you will have to consider is whether you want to complete the deal (assuming that they can 'un-do' the deal between M and N) or simply want your money back (with any additional expenses). If it is simply the latter then you need to consider whether or not you can sue N under the contract. The key questions for this action are (1) does N have any money to meet any claims and (2) how strong is your position under the contract: what precisely do N agree to do and on what terms do they hold your deposit? If, as I suspect might be the case, N has divested itself of its assets to avoid meeting claims such as yours, or if you want to go ahead with the deal, then the solicitors seem to be right that this will be complex. The difficulty is that the law views companies as separate entities and therefore not liable for each other's claims even when they are in a close relationship. In extreme circumstances you can 'pierce the corporate veil' (i.e. get at the parent company) but you have to show particular facts e.g. fraud. This could be complex and risky, depending on the facts and whether M fights the case. Are you liable for the costs of hiring this QC? Make sure that they don't run up costs that you don't want to incur. Given the problems with the above you may well find that the most efficient thing to do is to sue the solicitors in negligence. You would have to show that they have fallen below the standard accepted by solicitors of appropriate expertise. Depending on the precise facts, it sounds as if you may have a reasonable chance here - essentially you have to show that a competent professional would have registered the notice and would have done so in the time available). I strongly suggest that you get independent legal advice. If the case is clear they might not fight and as they are backed by the solicitors' indemnity fund you have a good chance of getting your cash back. If you do win then the court will give you damages to put you in the position that you would have been in if they hadn't been negligent. A settlement out of court should be along these lines too. I should say that these are my initial thoughts based on very little information so don't rely on them (i.e. don't sue me too if it goes wrong!!) but I hope that they are useful in putting together your initial thoughts. My strongest advice would be to go and talk to a lawyer who does professional negligence and commercial contract law. They should be able to tell you if it is worth pursing pretty quickly.
  13. I am a lawyer, although not a specialist land lawyer. There are a couple of aspects of your post that confuse me. It seems to me that N's decision to sell the land back to M does not mean that the contract is void, but that N is in breach of contract (although of course this depends on the contract). Clearly it is now impossible for N to complete their side of the contract but this is because N has taken action that makes this impossible. Does the contract say anything about this eventuality? Has your lawyer explained why this is an issue of the contract being void rather than N being in breach. At first sight, and this clearly depends on the terms, I would have thought that you could sue N under the contract for breach of contract and so obtain your deposit, interest, expenses and possibly other damages. Is N sovent? I don't understand how your title could be registered at the land registry when you have not completed and so have not obtained title. Do they mean some form of charge or caution? I would also suggest that you look at Motley Fool and post the question on their legal issues and practical property investing boards. Lots of lawyers/experienced property investors post there.
  14. Oxfordite, I in no way meant to imply that your friend was gready. As I said, all property has gone up in that time and he needs to keep up with the market. However, the market has now dropped and with hindsight it is clear that it had already started to drop at the point when he put it on. For that reason I think it is probably best if he forgets that he ever put it on above its current price and he should try not to think 'I've already cut it by £Xk I'm not taking any further offers' (if that is how he does think - many many people do) and should just feel that it was a mistake to advertise it at that price. IMHO the problem he now has is that it is still a bit on the high side compared to what you can get elsewhere but if he brings it down much more he hits the stamp duty problem. If he's not desperate to sell and just wants to see then that's fine, if he were desperate to sell then, if I were him, I'd put it on at £250K - it would be a pretty decent house in that range and if you wre lucky you'd get a bidding war. I hope I don't sound too negative as it looks very nice in terms of size and decor.
  15. Ah, it's 5 Egerton Road. If I went to look at this property I would come straight back home and check it out on ourproperty.co.uk where I would discover that if was bought for £182K in Dec 2001. I realise that all property has gone up in that time and that your friend needs to keep up with the market to buy the next place. However, seeing the figure in black and white is like a cold shower. Originally he wsa trying to get £325K after 3yrs of ownership. That's almost £50K for every year that he has lived there. Now it's dropped to almost £25K a year but I don't want to pay him that kind of bonus through my hard earned cash especially as the Oxford market has been stalled or falling for about half of that time. Apologies to your friend but looking at what he paid and what else has been paid on that street I think that it was simply over priced in the first place. If he had put it on in the spring of 2004 he may have got over £300K as someone else did but I think it was a mistake to do that after the summer of 2004. If I was him I would forget the cuts I'd already taken and I'd see £289 as a reasonable STARTING price and be willing to accept offers (assuming he wants to move) then try to get a similar discount on the place that he is buying. If these internet sites are better known I think that they really could change people's perception of reasonable price.
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